Expansion Project Equals First New Refinery for U.S. in 30 Years

Motiva’s construction on the Port Arthur refinery will almost double its crude oil throughput and makes it one of the world’s largest refineries by its 2010 targeted completion date.

Port Arthur Refinery Expansion Project Claims Largest in U.S.

Construction began by Houston-based Motiva Enterprises LLC, a refining and marketing joint venture owned by affiliates of Shell and Saudi Aramco, on its project to expand the 325,000 barrel-per-day (b/d) capacity expansion at its Port Arthur refinery to a crude oil throughput capacity to 600,000 b/d. The expansion will make it the largest refinery in the U.S. and one of the largest in the world.

The 325,000 b/d expansion at Port Arthur is equivalent to building the first new refinery in the U.S. in more than 30 years. The new production capacity is expected to be online in 2010 and will increase Motiva’s supply of Shell-branded fuels to the company’s wholesale and direct supply markets.

The expansion will bolster energy security in the U.S. by strengthening the supply of gasoline, diesel, aviation fuels and high quality base oils. In all, the refinery will produce about 23 million gallons of transportation fuels per day.

Motiva’s expansion will lower most types of emissions from refinery operations on a per barrel basis by utilizing advanced technology in all new system installations and by replacing existing systems. The expansion of the refinery will decrease emissions from present day levels for ozone precursors, specifically nitrogen oxides and volatile organic compounds.

Motiva awarded the contract to Oak Ridge, Tenn.,-based Bechtel/Jacobs Joint Venture to manage the expansion project as the engineering, procurement and construction contractor.

Dallas Area Rapid Transit Reorganizes Finances to Fund Expansion

Dallas Area Rapid Transit struggles to finance expanding rail line.

Controversy and questions surrounded a recent Dallas Area Rapid Transit announcement that escalating costs of construction materials and services worldwide meant back to the drawing board to trim up to $900 million in projected costs for future light-rail extensions to North Irving, DFW International Airport and Rowlett.

The $900-million figure was a preliminary target identified during a project update at the 10% design stage an early point in the cost estimation of DART’s rail projects. Additional project updates are performed as planners and engineers complete 30, 65 and 90 % levels of design in preparation for actual construction.

Initially, DART officials said a preliminary analysis shows the first leg of the 14-mi. North Irving line a 5.1-mi segment from Bachman Lake to Las Colinas Urban Center may be delayed up to one year, opening in 2012 simultaneously with another 4.1-mi segment to Belt Line Road.

But, an uproar from elected officials and residents sent DART staffers scrambling to find ways to fund much of the project and, as of press time, the Irving and Rowlett rail projects should not be delayed, according to DART officials. Money set aside for downtown Dallas and south Oak Cliff projects will be used.

Currently, DART’s 20-Year Financial Plan includes $988 million for the Irving/Rowlett rail extensions, and the $900 million escalation would bring the actual cost closer to $1.9 billion. About $350 million will be reallocated to the Irving/Rowelett project.

DART’s current financial plan calls for completion of the North Irving Line to DFW International Airport in 2013. The 5-mi Rowlett line is scheduled to open in 2012.

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Texas Eliminated From FutureGen Selection Before DOE Pulls Plug

Two Texas cities lost the race for the FutureGen power plant to Mattoon, Ill., before the U.S. Department of Energy withdrew its support for the project in early February.

FutureGen was a planned government-industry cost-shared project to design, build and operate a first-of-a-kind coal-fueled, “near-zero emission” power plant. The FutureGen power plant was described as having been “designed to produce electricity and hydrogen from coal while capturing and permanently storing carbon dioxide in a deep geologic formation.”

In 2005, the U.S. Department of Energy entered into a cooperative agreement with the FutureGen Industrial Alliance, Inc. to begin the FutureGen host site selection process and prepare a conceptual design for the facility. The process to select a site involved the issuance of a Request for Proposals from potential site hosts, a rigorous evaluation of the 12 proposals received, and the identification of candidate sites for full consideration by the Alliance and DOE.

Mattoon site proponents cited the ability to provide clear legal title to the power plant site, including the injection site, which could have resulted in minimal land-ownership risk. Other factors played into its selection.

Texas’ effort to attract FutureGen was directed by Texas Railroad Commission Chairman Michael L. Williams, who chaired the FutureGen Texas team, and by state geologist Dr. Scott Tinker, director of the Bureau of Economic Geology at the University of Texas, which reviewed and assembled Texas’ two proposals.

J. Ray McDermott Awarded Contract for Mexican Drilling Platform Work

J. Ray McDermott, S.A., a subsidiary of Houston-based McDermott International Inc., was awarded a contract recently by PEMEX Exploracion y Production, Northeast Marine Region, for the fabrication of the Maloob-C Drilling Platform. The project is located in the Ku-Maloob-Zaap field in the Bay of Campeche, Mexico, in 269 ft of water.

Work on the drilling platform began at Altamira in February with more than 275 craftsmen and professionals involved with the project. Designed to sustain 18 wells, the drilling platform will have a 3,200-short ton eight-legged jacket and a two-level deck weighing just over 2,500 short tons, with more than 3,300 short tons of piles. The contract is expected to be completed in the first quarter of 2009.

KBR Joint Venture Snags $24 Million Australian Contract

Houston-based KBR’s “Eos” joint venture with WorleyParsons was recently awarded a contract option worth approximately $24 million for the detailed engineering, procurement management and construction management assistance services for Woodside’s Pluto LNG Project offshore production platform north west of Karratha, Western Australia.

The Pluto offshore production platform is a riser and gas export platform with the capability to transfer 1,600 million standard cu ft per day. Eos was initially awarded the front-end engineering and design contract for the Pluto Offshore platform in September 2006. The contract provided an option for execution services to include detailed design, procurement management services and construction management assistance.

The initial phase of the Pluto LNG Project includes five subsea big bore wells on the Pluto field with flowlines to the offshore production platform, which is located in more than 275 ft of water. A 36-in. subsea pipeline will connect the offshore platform to an onshore liquefied natural gas production plant with an estimated production of 4.3 million tons per annum of LNG.

Fluor Corp. Manages $334M in Projects for Kuwait Oil Co.

Irving-based Fluor Corp. was awarded a five-year $334 million consultancy services contract to provide overall program management on several projects for Kuwait Oil Co. (KOC). Fluor will provide project and construction management and other services for new facilities and upgrading of existing facilities. The company plans to book the first two years of the contract, or approximately $90 million, in the first quarter 2008.

The Fluor project team currently resides in Ahmadi, Kuwait, with engineering performed from the firm’s Camberley office in the United Kingdom. Fluor had previously provided the consultancy services to KOC from 2003 to 2007 under a similar five-year contract.

The new capital projects include the development of oil gathering centers, gas booster stations and export facilities for KOC, which is the upstream operating company of Kuwait Petroleum Corp. Fluor is currently performing work for Kuwait National Petroleum Co. and Petroleum Industries Co., both subsidiaries of Kuwait Petroleum Corp.

Three Representatives Appointed to Toll Project Committee

Gov. Rick Perry recently appointed three individuals to the Study Committee on Private Participation in Toll Projects for terms to expire Dec. 31.

They are: John W. “Johnny” Johnson of Houston, chairman of Permian Mud Service, an oil-field service business; Robert W. Poole of Plantation, Fla., the director of transportation studies for the Reason Foundation; and Grady W. Smithey of Duncanville, secretary of the Dallas Regional Mobility Coalition and a retired public administrator of the U.S. Department of Agriculture.